Global loyalty program industry is growing rapidly and is predicted to reach USD 25 billion by 2020. Loyalty management has become an expensive and segmented process wherein merchants have to bear cost of loyal systems along with training. Shoppers need to monitor each loyalty point system from every retailer individually through separate portals. This becomes a complex process for both shoppers and merchants. Expenditure during business travel has crossed USD 1 trillion, while global tourism expenditure is pegged around USD 8 trillion. Increasingly, retailers are making constant effort to convert one time purchases from tourists to repeated orders. This can be influenced through loyalty programs and cross border reward earning and managing system. Some of the developments in this segment include Adyen entering into partnerships with Sabre Airline Solutions and NetSuite, which also aims at business expansion to Australia, Brazil and Hong Kong.
3. Market Context
Global loyalty program industry is growing rapidly and is predicted to reach USD 25
billion by 2020. Loyalty management has become an expensive and segmented
process wherein merchants have to bear cost of loyal systems along with training.
Shoppers need to monitor each loyalty point system from every retailer individually
through separate portals. This becomes a complex process for both shoppers and
merchants. Expenditure during business travel has crossed USD 1 trillion, while global
tourism expenditure is pegged around USD 8 trillion. Increasingly, retailers are making
constant effort to convert one time purchases from tourists to repeated orders. This
can be influenced through loyalty programs and cross border reward earning and
managing system. Some of the developments in this segment include Adyen entering
into partnerships with Sabre Airline Solutions and NetSuite, which also aims at
business expansion to Australia, Brazil and Hong Kong.
4. Market Context
International payment service provider Computop collaborated with PayU (payment
gateway) to increase international reach. Partnership between online payment
platform Alipay and Zapper, which is a consumer insights and marketing platform has
aided in usage of Alipay by Chinese tourists across 1000 location in the UK.
5. Key Insights
Singapore based start-up firm UTU Pte Ltd. founded by The Scotts Group and Korvac
Holdings introduced first of its kind cross border coalition loyalty programme UTU on
1st November 2016. This facilitates consumers to earn reward points across five debit
or credit cards which can then be redeemed at any of the partners worldwide. UTU
consolidates reward points from different credit and debit cards and reduces time to
process these points. There is no barrier towards cross border loyalty in this approach.
This new consumer model helps users to earn reward points now and redeem them at
POS. It also has a merchant portal that enables retailers to set up personalized
promotions and campaigns along with tracking return on engagement. Currently the
system is available in Singapore and Thailand which is planned to expand across
other Asian markets, United States, UK and other European markets as well by 2017.
6. PayNXT360 View
Coalition loyalty program aims to make it easier for merchants towards maintenance
of the system and preserve consumer interest by simplifying the process. In recent
quarters, there have been increasing number of start-ups targeting this space,
simplifying the loyalty program processes. PayNXT360 believes that over the next
four quarters more start-ups will launch their offering in this segment, making it
competitive and driving rate of innovation. Consumer loyalty programs help in
increasing profitability through purchases of higher margin products, low serving cost
and consumer referrals.
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